03 September 2015 by lberuti
Before the NFP release tomorrow, which people consider the most important economic print before the next and much anticipated FOMC on the 17th September, today was all about Central Bank as well. As was the case during most of his previous press conference, Mr Draghi did not disappoint the market and announced the ECB is getting ready to extend QE if needed. The credit index market anticipated that and all credit indices were firm from the word “go”. There was no panic selling of protection, but rather a steady grind. That was enough to leave the single name CDS market behind, particularly the Crossover universe in Europe, where some names are under severe pressure and are not over their summer woes (among them ABGSM – Abengoa- and ISOLUX were the most affected and both saw their risk premium go through the roof). The credit index bases (the difference between the traded levels of the credit indices and the theoretical values derived from their constituents) are back to the most negative levels of the year across the board.